With the economy as it stands, more and more people are finding it difficult to move out of their parents’ homes. In fact, the average age of Americans moving into their own place has raised exponentially, with many in their 30s still struggling to find their own home. However, is this because rent is so high? Or is it because house prices are too expensive? Perhaps it’s because many are struggling to save up for a deposit? Let’s have a look at the pros and cons of buying a house and renting, and which will make the most sense for those looking to move out.
Buying a house
The biggest drawback with buying a house of your own is that it’s expensive! Not only have house prices risen since the crash in 2007, but you’re going to need to save for a deposit too. Let’s not forget all of the fees you’re going to have to fork out for when you actually come down to buying. We know buying a home is expensive, and will take years of saving, but there are some big pros as well. Firstly, it’s your own property. You can decorate, you can have pets, you can have people to stay and throw parties if you like. It’s totally yours, to do with what you like. It’s also an investment for the future, as even when you need to move for whatever reason you should be able to sell the property for a profit. That is, of course, if another housing crash doesn’t happen when you want to sell. Many people are actually holding out for another housing crash before they buy, in the hope they can get a sound investment on the cheap.
Now we move onto renting a place – whether it be a whole apartment to yourself or sharing a house with roommates. One of the biggest problems when renting is that it’s not your own place. Some landlords may have an issue with you keeping pets or even painting the walls. When you leave, you’ll have to put the property back to the same state as when you initially moved in. However, renting is also cheaper for those who don’t have the money to put towards a mortgage deposit right away. The issue with this is it’s kind of ‘lost money,’ as you’re not paying towards keeping the property. You also need to keep an eye out for rogue landlords who aren’t doing things by the book. Make sure you’ve got a proper contract in place when you rent, to save any trouble in the future. However, on the plus side, you don’t need as good a credit rating as you would if you were buying a house, so this can be handy if you’re working on rebuilding your credit.
Which one is best?
It’s a difficult to choose which option is best, because it depends on so many different variables. Realistically, being able to buy your own house is going to put you in a better position in the future. It’s an asset and also an investment, as long as you keep up with your mortgage repayments. However, with house prices getting higher, perhaps it’s not such a smart investment move after all – it may be worth waiting until the prices drop once again, which they inevitably will. It seems as though the best case scenario would be to rent a property with someone else, to keep costs low. That way you can still save up for a deposit and build up a strong credit rating while you’re finding the house of your dreams (at a price you can afford). Just make sure you do everything by the book if you are renting, so that you don’t end up in an awkward position later down the line.
We hope our pros and cons have given you some food for thought. If you’re desperate to leave home, then work out what you can afford and go from there. And always, always make sure you pay your rent or mortgage on time!